Tax on drawdown question
#46
Forum Regular
Joined: Apr 2021
Posts: 137
Re: Tax on drawdown question
For non-earned income, you get personal allowance of 5,550 euro and 6,700 euro if aged 65 or over. Tax rate is 19% on first 12,450 euro and 24% on next chunk up to 20,200 euro. So assuming you are under 65, £12,000 is 13,860 euro, you pay 19% on 13,860 - 5,550 = 8,310 euro or 1578. 90 euro or around £1,367.
Thanks Joppa 😊
#47
Re: Tax on drawdown question
Those figures are incorrect. You get a personal allowance of 6700 if over 65 and 8100 if over 75 plus everyone gets another 2000 general allowance, and if you have a low income, you get another sliding scale allowance of 3700 reducing to zero when your income exceeds 14450.
#48
BE Enthusiast
Joined: Feb 2020
Location: Nerja
Posts: 594
Re: Tax on drawdown question
Those figures are incorrect. You get a personal allowance of 6700 if over 65 and 8100 if over 75 plus everyone gets another 2000 general allowance, and if you have a low income, you get another sliding scale allowance of 3700 reducing to zero when your income exceeds 14450.
#49
Forum Regular
Joined: Apr 2021
Posts: 137
Re: Tax on drawdown question
Those figures are incorrect. You get a personal allowance of 6700 if over 65 and 8100 if over 75 plus everyone gets another 2000 general allowance, and if you have a low income, you get another sliding scale allowance of 3700 reducing to zero when your income exceeds 14450.
So, if you don't mind me asking.
What would I pay in taxes in Spain, seeing that my only income would be the £12k rental income and I'm 54?
All of this is worrying me now....
#50
Re: Tax on drawdown question
#51
Re: Tax on drawdown question
So, you will probably pay no tax in Spain on the rental income as the net income will be less than your allowances.
#52
Forum Regular
Joined: Apr 2021
Posts: 137
Re: Tax on drawdown question
If you are letting the property as a long term residential let, you only pay tax on 40% of the net rental. Also you get some generous expenses deductions.
So, you will probably pay no tax in Spain on the rental income as the net income will be less than your allowances.
So, you will probably pay no tax in Spain on the rental income as the net income will be less than your allowances.
Does anyone have an accountant or tax expert in Spain that they can recommend please?
#53
BE Enthusiast
Joined: Feb 2020
Location: Nerja
Posts: 594
Re: Tax on drawdown question
If you are letting the property as a long term residential let, you only pay tax on 40% of the net rental. Also you get some generous expenses deductions.
So, you will probably pay no tax in Spain on the rental income as the net income will be less than your allowances.
So, you will probably pay no tax in Spain on the rental income as the net income will be less than your allowances.
#57
Re: Tax on drawdown question
I have just checked with the latest info from the Blevins Franks tax guide and it says
A reduction of 60% is available against net rental income for residents of Spain before tax is payable (only available for long-term lettings). This also includes lettings income from outside Spain. Additionally, some expenses can be deducted from the gross rental income, but not all of them.
A reduction of 60% is available against net rental income for residents of Spain before tax is payable (only available for long-term lettings). This also includes lettings income from outside Spain. Additionally, some expenses can be deducted from the gross rental income, but not all of them.
#58
Forum Regular
Joined: Jun 2014
Location: Herts
Posts: 144
Re: Tax on drawdown question
Hi Fred and LynnR,
Using "Taxleak" entering €22,500, over 65 and retired, this is the result do you think this is accurate?
Also where do I add the Social Security total of €1,428.75? as it would have to be taxed and not payable as not employed.
Social Security (6.35 %)
€1,428.75
Total Deductions
€4,406.79
Net Annual Salary
€18,093.21
Net Monthly Salary
€1,507.77
Net Weekly Salary
€376.94
Using "Taxleak" entering €22,500, over 65 and retired, this is the result do you think this is accurate?
Also where do I add the Social Security total of €1,428.75? as it would have to be taxed and not payable as not employed.
Social Security (6.35 %)
€1,428.75
Total Deductions
€4,406.79
Net Annual Salary
€18,093.21
Net Monthly Salary
€1,507.77
Net Weekly Salary
€376.94
#59
Just Joined
Joined: Mar 2021
Posts: 12
Re: Tax on drawdown question
My mistake, the post Brexit change only applies to UK residents receiving rental income from a property in Spain, in this case the tax increases from 19% to 24% and is applied to gross income. The ops situation sounds to be the reverse of this - resident in Spain receiving rental income from the uk so no change.
#60
Forum Regular
Joined: Dec 2020
Posts: 228
Re: Tax on drawdown question
Annuity rates are particularly low at the moment, and drawdown is much more flexible. The other advantage of drawdown over annuity is that when you die the fund is still available in your estate.
Please n ote that I am NOT a finacial adviser and this does not constitute financial advice.
I would strongly suggest that you at least make enquiries. Currently in the UK, if you wish to move from one type to another and the pot is greater than £30,000 then it is a legal requirement to take independent financial advice.